Using net benefit analysis to value costs and benefits of re-grouping in organization design

DSM clustering methods and software tools for organization design utilize data about task interdependencies to optimize a solution based on a single grouping criterion: Minimization of coordination costs. At the same time, there may be unwanted side-effects of optimizing based on this criterion alone, such as an increased difficulty of functional learning (e.g., supervision and knowledge exchange among functional specialists). The challenge is that it has so far been difficult to quantify and analyze such additional criteria, which may be qualitative. In this paper, we consider whether the “net benefit” method from medicine can be utilized to bring together qualitative and quantitative criteria on the same scale and compare both the costs and benefits of alternative organizational structures.